Belo Mgmt. Servs., Inc. v. Click! Network
| Decision Date | 25 November 2014 |
| Docket Number | No. 45577–3–II.,45577–3–II. |
| Citation | 343 P.3d 370 |
| Court | Washington Court of Appeals |
| Parties | BELO MANAGEMENT SERVICES, INC., a Delaware corporation; Kiro–TV, Inc., a Delaware corporation; Tribune Broadcasting Seattle; LLC, a Delaware limited liability company; and CBS Corporation; Respondents, v. CLICK! NETWORK, a Department of Tacoma Public Utilities Division of the City of Tacoma; and Tacoma News, Inc.; Appellants. |
OPINION TEXT STARTS HERE
Reversed and vacated. James Walter Beck, William Edward Holt, Eric Daniel Gilman, Gordon Thomas Honeywell LLP, Tacoma, WA, for Appellants.
Ward Douglas Groves, Tacoma City Attorneys Office, Tacoma, WA, for Defendant.
Emily Kelly Arneson, Duane Michael Swinton, Witherspoon Kelley, Steven Joseph Dixson, Attorney at Law, Spokane, WA, Joseph Zachary Lell, Geoffrey Julian Mars Bridgman, Ogden Murphy Wallace, P.L.L.C., Seattle, WA, for Respondents.
Judith A. Endejan, Garvey Schubert Barer, Seattle, WA, for Respondent Intervenors.
Michele Lynn Earl–Hubbard, Allied Law Group LLC, Seattle, WA, Amicus Curiae on behalf of Allied Daily Newspapers of Washington.
Michele Lynn Earl–Hubbard, Allied Law Group LLC, Seattle, WA, Amicus Curiae on behalf of Washington Newspaper Publishers Association.
¶ 1 Tacoma News, Inc. appeals the trial court's order enjoining the disclosure of unredacted retransmission consent agreements (RCAs) between Click!, a cable system owned by the City of Tacoma (the City), and five broadcasters. The court ruled that the pricing information portions of the RCAs were trade secrets exempt from disclosure under the Public Records Act 1 (PRA). Tacoma News argues that the RCAs do not contain trade secrets, the court should have conducted in camera review of the unredacted RCAs, the broadcasters did not prove the requirements for an injunction under the PRA, the injunction is overbroad, and it is entitled to attorney fees and costs. The broadcasters argue that we should uphold the injunction because the RCA pricing information qualifies as trade secrets or, alternatively, federal regulations exempt the pricing information from PRA disclosure.
¶ 2 We hold that the RCA pricing information is not a trade secret and that the broadcasters failed to meet their burden of proving that the non-cash compensation information in the agreements qualifies as a trade secret. Additionally, the federal regulations cited by the broadcasters do not qualify as an “other statute” under the PRA which exempts the pricing information from disclosure. Moreover, the broadcasters failed to establish the requirements for an injunction under the PRA. Accordingly, the trial court erred when it enjoined disclosure of the unredacted records. Tacoma News is not entitled to attorney fees under the PRA because the private broadcasters, rather than the City, opposed the disclosure. We reverse and vacate the injunction.
¶ 3 This case involves whether pricing information in contracts between the City-owned cable system, Click!, and several broadcasters should be disclosed under the PRA. Cable systems must obtain express consent from broadcasters and pay license fees to retransmit the broadcasters' shows. Cable systems and broadcasters enter into RCAs that include license fees. The fees are negotiated between the individual broadcasters and the cable systems. Both the cable systems and the broadcasters consider the licensing fees confidential. The amount paid in fees is not shared with third parties. These figures are only known, on a need to know basis, by a few employees within each party's organization. These employees are required to keep the information confidential. Clerk's Papers (CP) at 36. T between Click! and the broadcasters, however, specifically put the broadcasters on notice that the RCA's terms are subject to potential disclosure under chapter 42.56 RCW.
¶ 4 Click! had difficulty negotiating the 2013 RCAs with one of the broadcasters, Fisher Communications. As a result, Click! customers were unable to view the channels broadcast by Fisher. In response to this situation, Tacoma News filed a public records request with Click! seeking copies of the current RCAs between Click! and “all broadcast entities.” CP at 43. The City determined that there were no applicable PRA exemptions and it notified the broadcasters that it intended to release the RCAs to Tacoma News.2 The broadcasters sought an injunction prohibiting the City and Click! from releasing the RCAs. The broadcasters claimed that the RCAs contained pricing information that qualified as a trade secret.
¶ 5 The broadcasters and Click! submitted affidavits and declarations stating that they considered the rebroadcast fee information confidential. The broadcasters alleged that they would be harmed by disclosure. They claimed that other cable systems would use the disclosed fees Click! paid to negotiate lower fees for themselves. The broadcasters stated that rebroadcast fees are a significant and growing portion of their revenue. The broadcasters claimed that they would not have a similar opportunity to discover the fees other cable systems paid because most cable systems are privately-owned and not subject to the PRA, which would put them at a disadvantage in negotiating RCAs. Additionally, both the broadcasters and Click! stated that disclosure would harm Click! and the public because it would discourage broadcasters from contracting with Click! because Click! could not promise confidentiality, it would likely raise Click!'s fees because the broadcasters would use the highest disclosed fee as a baseline, and the preceding issues would result in fewer available channels and increased rates for Click! customers.
¶ 6 The trial court ruled that the RCAs contained trade secrets and enjoined Click! from releasing the RCAs and any related records. Tacoma News moved for reconsideration. It argued that the court should review the unredacted RCAs in camera and, if it still found that the agreements contained trade secrets, redact the exempt information and release the redacted RCAs. The court granted the motion for reconsideration and set a hearing to establish the process by which it would receive and review the unredacted RCAs. The court further ordered the parties to submit briefing regarding the sealing of the unredacted RCAs. The court clarified that the injunction was still in effect and that the City must submit RCA-related records to the broadcasters for approval before releasing the records to any requesters.3
¶ 7 After a hearing, the trial court determined that in camera review was unnecessary in light of the broadcasters' affidavits and declarations which described the redacted information. Based on the affidavits and declarations, the court concluded that the redactions contained trade secrets that were exempt from disclosure under the PRA. The court never reviewed unredacted copies. Instead, the court ordered Click! to release the records with the redacted information.
¶ 8 Tacoma News appealed to our Supreme Court. That court denied direct review and transferred the case to us.
¶ 9 The PRA requires each agency to make public records available for public inspection unless the record falls within the specific exemptions of the PRA or other statute. RCW 42.56.070(1). The PRA should be “ ‘liberally construed to promote full access to public records, and its exemptions are to be narrowly construed.’ ” King County Dep't of Adult & Juvenile Det. v. Parmelee, 162 Wash.App. 337, 350, 254 P.3d 927 (2011) (quoting Amren v. City of Kalama, 131 Wash.2d 25, 31, 929 P.2d 389 (1997)). Persons who are named in the record or to whom the record pertains may move the trial court to enjoin the release of the records. RCW 42.56.540; Parmelee, 162 Wash.App. at 350, 254 P.3d 927. The court may enjoin production of requested records if it finds that production would not be in the public's interest and would substantially and irreparably damage any person or vital government function. RCW 42.56.540.
*656 ¶ 10 We review injunctions issued under the PRA de novo. 4 Parmelee, 162 Wash.App. at 351, 254 P.3d 927. Where, as here, the record consists only of documentary evidence, we stand in the same position as the trial court. Progressive Animal Welfare Soc'y v. Univ. of Wash., 125 Wash.2d 243, 252, 884 P.2d 592 (1994).
¶ 11 The broadcasters do not argue that the RCAs are not public records subject to the PRA. Rather, they argue that the records are exempt from disclosure. The trial court concluded that the pricing information in the RCAs was exempt as a trade secret. Tacoma News disagrees. We hold that the broadcasters failed to prove that the fees are a trade secret.
¶ 12 A public record is exempt from disclosure under the PRA if the record falls within an “other statute” that exempts or prohibits disclosure of specific information. RCW 42.56.070(1). The Uniform Trade Secret Act 5 (UTSA) qualifies as an “other statute” exempting disclosure. Progressive Animal Welfare Soc'y, 125 Wash.2d at 262, 884 P.2d 592. This statute allows courts to take action to protect trade secrets. Progressive Animal Welfare Soc'y, 125 Wash.2d at 262, 884 P.2d 592 (citing RCW 19.108.020(3), .050).
¶ 13 The UTSA defines a trade secret as
information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
RCW 19.108.010(4). The information must be “novel,” meaning that it must not be readily ascertainable from another source. Spokane Research & Def. Fund v. City of Spokane, 96 Wash.App. 568, 578, 983 P.2d 676 (1999).
¶ 14 The broadcasters have the burden of...
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